Hurricane Harvey victims along the Gulf Coast continue to fight for proper claims treatment from Texas Windstorm Insurance Association—better known as TWIA. On August 27, 2018, KPRC Channel 2 News Houston profiled the ongoing problems property owners are facing with their TWIA claims.

KPRC Channel 2 News Houston interviewed me as part of its ongoing investigation. The investigative report can be viewed at this link:

KPRC uncovered various emails from within TWIA that exhibit TWIA’s intent to close over 1,000 claims each day – those emails are from as early as September 2017, mere weeks after Harvey. Unfortunately, in many cases it appears that TWIA sacrificed the quality of its claims assessments – which are supposed to be thorough and reasonable – to meet its claim closure goals. The emails I reviewed as part of my interview further support what I have been hearing and seeing every day in my role as Attorney and Regional Litigation Manager for Merlin Law Group, P.A.

Not surprisingly, thousands of TWIA claims remain unresolved and TWIA policyholders are stuck in limbo.

TWIA’s claims handling is concerning but not entirely surprising. After Hurricane Dolly (2008) and Hurricane Ike (2008), we exposed TWIA’s extraordinarily deficient and fraudulent claims handling practices. TWIA’s claims handling behavior for Ike and Dolly was so terrible that the Texas Department of Insurance took control of TWIA to get the insurer of last resort in line.

In 2011, the Texas Legislature rewrote the laws that govern TWIA, but rather than punish TWIA and create more stringent laws for it to comply with, the Texas Legislature essentially granted TWIA partial immunity for its bad acts. Under the Texas Legislature’s new law (better known as HB3 or Tex. Ins. Code 2210), TWIA, its employees, adjusters, building consultants, etc., can only be held liable or responsible during very limited circumstances. Essentially, no matter how poorly TWIA and its personnel treat their policyholders, TWIA will only be legally responsible in very limited circumstances. So now, what we’re seeing is that TWIA does very little investigation on claims, but issues letters that say they’re accepting the claim. However, just because they accept the claim doesn’t mean they will properly pay it.

TWIA has no incentive to properly investigate and handle a claim because they know actions against them are limited under the law. Below are three scenarios highlighting the current problem policyholders face under the new TWIA laws. A TWIA policyholder with severe Hurricane Harvey wind and water damage files a claim:

  • Scenario 1 – TWIA wholly fails to inspect the property but sends a letter that the policyholder’s damage is accepted but under the deductible so TWIA is not paying for the claim.
  • Scenario 2 – TWIA sends an adjuster to inspect the policyholder’s property. The adjuster determines the covered damages are valued at $100,000.00. TWIA doesn’t care what its adjuster determined. TWIA issues a disposition letter that says it will pay the policyholder $10,000.00.
  • Scenario 3 – TWIA sends an unlicensed building consultant, who has no experience in storm damage evaluation, to inspect the policyholders claim and damage. The building consultant doesn’t get on the roof, and his camera dies after 4 photos. The building consultant submits his 4 photos to TWIA and says that any other damages not photographed were related to flood damage (which is not true). TWIA issues a letter to the policyholder that says its accepts the claim for wind damage and will issue $1,000, but since the rest of the damage was caused by flood it will not pay for those uncovered damages.

It seems TWIA is yet again padding its bottom line with little regard for its policyholders’ lives. It will be interesting to uncover what TWIA’s other emails reveal, but this “turning and burning” style of claims handling is very concerning for Texans.